Fiscal Policy and External Performance: The Turkish Experience

28 Pages Posted: 15 Feb 2006

See all articles by George Kopits

George Kopits

International Monetary Fund (IMF)

Date Written: March 2, 1989

Abstract

In 1980 Turkey embarked on a far-reaching stabilization and liberalization program, which contributed to export-led growth and a significant movement toward both domestic and external equilibrium. Later, as fiscal policy was partly reoriented from a restrictive to an expansionary stance while adhering to a flexible exchange rate policy, inflationary pressures intensified but the external current account did not deteriorate. Counterfactual simulations, performed with a computational general equilibrium model, suggest that Turkey would have experienced a significantly lower inflation rate, with only a small reduction in growth, if it had adopted a less expansionary fiscal stance.

JEL Classification: 123, 321, 431

Suggested Citation

Kopits, George, Fiscal Policy and External Performance: The Turkish Experience (March 2, 1989). IMF Working Paper No. 89/20, Available at SSRN: https://ssrn.com/abstract=884637

George Kopits (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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